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Taking At Look At Lodging: Wells Fargo Downgrades 2 Names In Hospitality

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Taking At Look At Lodging: Wells Fargo Downgrades 2 Names In Hospitality

Hyatt Hotels Corporation (NYSE: H) and La Quinta Holdings Inc (NYSE: LQ) both saw their ratings and earnings estimates for this year and next lowered by Wells Fargo on Tuesday. La Quinta was lowered to Underperform from Market Perform; Hyatt to Market Perform from Outperform.

La Quinta shares traded down 8 percent at $10.36, while shares of Hyatt were down just short of 1 percent at $46.38.

Wells Fargo analysts kicked the tires of the lodging industry in a note that described their forecasts for softer than expected top-line growth for the second quarter of 2016. Combined with tighter lending conditions, their unfavorable growth estimates led them to lower earnings forecasts for the entire lodging space.

Specifically, La Quinta was said to be overvalued based on a “sum-of-parts” valuation, while Hyatt lacks near-term catalysts in the analysts’ opinion.

Some companies Wells Fargo believes to be trading at sharp discounts and to be capable of outsized returns once conditions in the industry improve include Hilton Worldwide Holdings Inc (NYSE: HLT) and Diamondrock Hospitality Co (NYSE: DRH).

Latest Ratings for LQ

DateFirmActionFromTo
May 2018MaintainsOverweightOverweight
May 2018MaintainsOverweightOverweight
Mar 2018MaintainsHoldHold

View More Analyst Ratings for LQ
View the Latest Analyst Ratings

Posted-In: Wells FargoAnalyst Color Long Ideas Downgrades Travel Analyst Ratings Trading Ideas General Best of Benzinga

 

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